Considering new four-year expansion project

Assignment Help Financial Management

Reference no: EM131500273

The Book Store is considering a new four-year expansion project that requires an initial fixed asset investment of $2.1 million. The fixed asset will be depreciated straight-line to zero over its four-year life, after which time it will be worthless. The project is estimated to generate $.98 million in annual sales, with costs of $.79 million. If the tax rate is 34 percent, what is the OCF for this project?

Reference no: EM131500273

Questions Cloud

What does it imply about shape of individuals supply curve : In the face of reduced interest rates, one financial columnist gave the following advice: To compensate for such modest returns.

Costs and benefits of debt financing besides the tax shield : What are the other two costs and two benefits of debt financing besides the tax shield?

Differences between software security and network security : Explain Differences between Software Security, Application Security, Web Application Security and Network Security.

Evaluate the given statement : One of your authors received the following ma-sage in an e-mail from a student "An individual who owns the house he lives in forgoes receiving rent.

Considering new four-year expansion project : The Book Store is considering a new four-year expansion project that requires an initial fixed asset investment of $2.1 million.

Write a formula for tax revenues as a function of tax rate : In an economy the supply curve of labor, S, is given by S = -100 + 200wn.

What will the initial outlay for the project be : Faraway decides to adjust for these flotation costs by adding them to the initial outlay, what will the initial outlay for the project be?

What is? cryptons cost of capital where firms tax rate : What is? Crypton's cost of capital where the? firm's tax rate is 30 ?percent?

Identify the company primary competitors : Identify the company's primary competitors. Show the size in revenues or market cap of the company along with its top competitors

User Account

All Pages